China Policy Brief: China’s 2024 Central Economic Work Conference

19 December 2024 / Report

Against the backdrop of weaker economic momentum, softening demand, and deflationary pressures, the Chinese government has decided to intensify stimulus measures to boost private spending, stabilize the property market, and build new growth drivers. While this will arguably prop up growth, its sustainability hinges upon advancing structural reforms.

Held every December, the Central Economic Work Conference (CEWC) convenes China’s top leadership to define the priorities that will guide the government’s economic work in the year ahead.

Key Insights

Held every December, the Central Economic Work Conference (CEWC) convenes China’s top leadership to define the priorities that will guide the government’s economic work in the year ahead.

Key Insights

This year’s Central Economic Work Conference (CEWC) marks a shift in the Chinese government’s prudent and targeted stimulus approach to a more expansionary stance. Despite a focus on preventing an escalation of systemic risks, China’s top leadership has declared its intention to adopt a more accommodative stance in monetary policy and to increase fiscal spending to help stabilize the economy. Recent data suggests this is likely to have a positive impact on key economic indicators,and could push the economy past our 2025 GDP growth forecast of 4.5%.
While this year’s CEWC emphasizes economic initiatives over national security, this should not be taken as a shift in China’s long-term policy focus. Strengthening national security and achieving technological self-reliance remain crucial for China's vision of becoming a 'high-standard socialist market economy' by 2035. The view is that ensuring a functioning and dynamic economy is a necessary condition for national security, and both aspects are integral to the overall policy agenda.
Expanding domestic demand, particularly boosting consumer spending, emerged as the top priority for the government’s economic agenda in 2025. Tasks include raising income levels, reducing the financial burden of households, increasing pensions for retirees, supporting job creation, and improving the efficiency of investments. This said, the lack of concrete details on structural reforms raises uncertainty about whether there will be real progress. China needs to enable a sustainable recovery of confidence levels and, in turn, of consumer spending.
We expect to see more fiscal and monetary support aimed at stabilizing the property sector, including boosting housing sales, and converting unsold inventory into social housing units. But there is no intention for the property sector to go back to being such an important growth driver. Instead, the focus will shift towards carefully managing the supply of new real estate land, revitalizing existing properties, and facilitating the effective disposal of commercial housing.
That the development of “new quality productive forces” was not designated as the top priority for 2025 does not indicate a diminished commitment from China’s top leadership. On the contrary, the focus will be on enhancing financing channels to facilitate technological innovation, and on reducing inefficiencies and resource waste stemming from unregulated investments by, and competition amongst, local governments.
Other measures to support the economy include new investments to bridge the development divide across China’s regions and between urban and rural areas; accelerating the green transformation of the economy to both reduce emissions and pollution and drive growth; and stabilize foreign trade and investment.